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Re: biglued1 post# 34199

Tuesday, 04/11/2017 2:14:02 PM

Tuesday, April 11, 2017 2:14:02 PM

Post# of 51028
Them and company insiders...all 3 can have the same affect:

Investor relations firms: Investor relations firms often provide services to penny stock companies, such as arranging meetings for management with investors and analysts, tailoring corporate presentations and disseminating press releases. In return, they're often compensated with cash and shares of the company's stock. Unsurprisingly, these firms are likely to be sellers of penny stocks rather than buyers.



Corporate insiders:
When corporate insiders such as top management buy shares of their company's stock, it's usually taken as a sign of confidence in the company's prospects. Conversely, when these insiders dump shares, it's often an indication that the company is deteriorating and that its stock price may collapse. This rule of thumb doesn't quite apply to penny stocks, however, as insider activity usually goes in one direction: the amount of selling generally dwarfs buying rates



[quote]Market makers: A market maker is a broker-dealer who facilitates trading in a specific security by displaying bid and ask quotations for a number of shares. Market makers that attempt to provide liquidity to the penny stock market naturally become significant contributors to trading volume. Upon receiving a buy order from a trader, the market maker may either sell shares from its inventory or buy them from the market for onward sale to the investor. Conversely, for a sell order, the market maker may either absorb the shares into its inventory or immediately dump them into the market.